Alibaba Update. So Alibaba is now officially a player. Overnight Alibaba has gone from some obscure Chinese company no-one had heard of or cared about, to a multinational conglomerate with a slightly bigger market capitalization than Amazon. No, hold that “slightly”. Alibaba went from nowhere to a market capitalization ONE HUNDRED BILLION DOLLARS BIGGER than Amazon. And while Amazon went cap in hand to Bank of America last week to BORROW another $2 billion to add to its already substantial debt, Alibaba pocketed TWENTY-TWO BILLION dollars of surplus cash. As I’ve been saying this past year or two, the centre of digital gravity is fast-shifting to what we Brits call the Far East, and what Americans call the Asia-Pacific Rim. The Alibaba “event” should really ram this home. You may never have heard of Tencent, Baidu and JD either, but expect to hear a lot more about these Chinese titans in the near future. And yes, whether they have ebook stores now or not, they will impact dramatically on our writing careers over the next decade. With Nook up for grabs in the New Year, Alibaba has to be a key contender. Alibaba could buy Nook out of loose change, and throw so much money at it it could become a serious global player, on par with Google Play and Apple. Would Alibaba be interested in an ebook store? That it hasn’t gone down this road already is the only thing that surprises me. Alibaba has a far wider range of interests than Amazon. Just in 2014 Alibaba has invested in operations as diverse as these: The American luxury goods (fine art, jewelry, furniture, antiques) purveyor 1st Dibs. TutorGroup, the global online language tuition service. ChinaVision – one of Alibaba’s many investments in film and TV production. Hong Kong based ChinaVision is also involved with games and books, both print and digital. Nor was this the only investment in video this year, Alibaba also threw money at Youku and Wasu. Tango. No, not the soft drink. The US-based messaging service. Alibaba will be using Tango as part of its developing global e-commerce platform, and with 70 million active monthly users Tango is worth keeping a close eye on. InTime. If you’ve ever been to China you’ll know of In Time’s eight bricks & mortar shopping malls and its 28 department stores. Unlike Amazon, Alibaba is no stranger to, and embraces, bricks and mortar outlets. And of course In Time customers pay in-store with their smartphones using Alibaba’s payment arm Alipay (see below). Lyft. Yes, as in the California-based rival to Uber. Make no mistake. Albaba may be new to Americans, but America is not new to Alibaba. Like Amazon, Alibaba likes to deliver goods as well as sell them. This year Alibaba invested heavily in shipping and logistics operations including China Smart Logistics and Singapore’s national delivery service Signpost. Alibaba even bought 50% into one of China’s biggest soccer teams, Guangzhou Everglande. You may have heard of UCWeb, a China-based mobile browser which is used as widely as Vietnam, Indonesia, Russia and the USA, and is the most popular mobile browser in India. Guess who owns it... Another significant US investment came with Alibaba buying into Kabam, the American games producer that has players in over 150 countries. That’s just some of Alibaba’s investments this year, and doesn’t include 11.Main, the newly-created online store in the US. And of course it doesn’t touch on the many arms of Alibaba’s business empire that pre-dates this year. Unlike Amazon, Alibaba manages to invest and still make a profit. While Amazon is set to report a half billion dollar loss next month, Alibaba makes profits Amazon can only dream of. On top of all this, Alibaba’s payment arm Alipay has partnered with Stripe, as the first step towards wider acceptance of Alipay in the west. Alipay is already bigger than Paypal and Square combined. How much bigger? Alipay handles more transactions in ONE DAY than Paypal handles in a year. With 800 million customers on its files Alipay rivals Apple and is four times bigger than Amazon. Thanks to AliExpress Alibaba already is an international player for merchants (many of the goods sold on eBay and Amazon by third party sellers actually comes from Alibaba). Unlike Amazon, which takes anything from 30% to 65% of list price, AliExpress charges less than 5%, and at home in China listings are completely free. As Alibaba expands globally it CAN and WILL undercut Amazon at every turn as it gains momentum in Amazon’s marketplaces. Including ebooks and other digital products when the time comes. Which could be as soon as next year if they are allowed to buy Nook. And I’d be very surprised if they didn’t sling some money at B&N too. Plenty of life left in print yet, and unlike Amazon, Alibaba fully understands the value of bricks and mortar stores (see photo attached). Don’t expect overnight miracles as Alibaba gathers momentum outside of China, but do be prepared to see the great disruptor greatly disrupted over the next few years.
Posted on: Mon, 22 Sep 2014 10:24:39 +0000
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